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Can someone help solve all the question and specific detail to help me understand? Chapter 2 Utility 2.1 Homework exercises Suppose that a consumer's preferences
Can someone help solve all the question and specific detail to help me understand?
Chapter 2 Utility 2.1 Homework exercises Suppose that a consumer's preferences over food (good x) and clothing (good y) are represented by the utility function U(x, y) = xy + x The associated marginal utilities are, MU, = y + 1 and MUy = x. Answer the following questions: Question 1: Is the more is better assumption satisfied for both goods? Question 2: Is the principle of diminishing marginal utility satisfied for both goods? Question 3: Do indifference curves intersect the x- and y-axes? (Hint: Consider the indifference curve corresponding to a utility of 10.) Question 4: Derive an expression for the marginal rate of substitution. Question 5: Is the marginal rate of substitution diminishing? Briefly explain. Question 6: On a graph, draw a typical indifference curve. The graph should illustrate all of the features that you have derived in previous questions. The worked solutions can be found on the next page... Chapter 2 Utility 2.1 Homework exercises Suppose that a consumer's preferences over food (good x) and clothing (good y) are represented by the utility function U(x, y) = xy + x The associated marginal utilities are, MU, = y + 1 and MUy = x. Answer the following questions: Question 1: Is the more is better assumption satisfied for both goods? Question 2: Is the principle of diminishing marginal utility satisfied for both goods? Question 3: Do indifference curves intersect the x- and y-axes? (Hint: Consider the indifference curve corresponding to a utility of 10.) Question 4: Derive an expression for the marginal rate of substitution. Question 5: Is the marginal rate of substitution diminishing? Briefly explain. Question 6: On a graph, draw a typical indifference curve. The graph should illustrate all of the features that you have derived in previous questions. The worked solutions can be found on the next page Step by Step Solution
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